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Demand in the Welsh housing market declined to its lowest rate since 2008 last month amid pressure from high mortgage rates, according to surveyors. The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey for August showed a net balance of -66% of Welsh property professionals reported a fall in new buyer enquiries.

This was the most negative reading since 2008 outside of lockdown restrictions, and the lowest since 2020. A net balance of -41% of professionals reported house prices falling in August rather than rising.

While a net balance of -77% of those anticipate prices to continue to fall over the next quarter, down from -58% in July and lower than the º£½ÇÊÓƵ average at -67%. In terms of supply on the market, a net balance of -55% of surveyors reported a fall in new properties coming onto the market.

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Low levels of demand and supply has had a marked impact on current and projected house sales. A net balance of -38% of respondents reported a fall in newly agreed sales through August.

Looking ahead, near-term sales expectations remain subdued with surveyors saying they don’t expect a turnaround in the market in the immediate future. A net balance of -45% of respondents anticipate a fall in sales. However, William Graham FRICS of Graham & Co in Newport, said: “Attractive well-presented homes continue to sell at broadly the asking price.”

Anthony Filice FRICS of Kelvin Francis Ltd, in Cardiff said: “Viewing levels have been lower during the holiday period. Sales are being agreed, but below vendor expectations, many of whom are not aware of the impact of interest rates on values. Buyers are expecting discounts and sales are agreed when parties to a chain agree to share those discounts.”

RICS chief economist Simon Rubinsohn said: “The latest round of feedback from RICS members continues to point to a sluggish housing market with little sign of any relief in prospect.

“Buyer enquiries remain under pressure against a backdrop of economic uncertainty and the high cost of mortgage finance. Meanwhile, prices are continuing to slip albeit that the relatively modest fall to date needs to be seen in the context of the substantial rise recorded during the pandemic period. Critically, affordability metrics still remain stretched in many parts of the country.

“The other side of the softer demand in the sales market is the continuing strength of rental demand. The yawning gap with rental supply is clearly visible in the RICS Rent Expectations indicator which remains close to an all-time high.

“Anecdotal comments from contributors that landlords are leaving the sector suggests the challenging environment for tenants is unlikely to improve any time soon”.